Bwin.party issues full-year revenue warning
Operator says full-year revenues will fall to around 610m as discussions over a potential break-up of the business continue
Bwin.party says a run of punter-friendly sports results in December will hit full-year revenues while confirming talks over a potential sale or break-up of the business continue.
In a pre-close trading update bwin.party said its 2014 revenues were likely to fall between 608m and 612m, roughly 7% short the 652m posted last year and less than the 618m-630m predicted by analysts following the operator’s Q3 update.
According to the London-listed operator, the shortfall is due to an “exceptionally weak gross margin in sports betting” with “teams in several European leagues enjoying a strong run” and will result in full-year clean EBITDA margin in the range of 16%-17%.
Bwin.party’s New Jersey-facing business and social gaming operation were predicted to post full-year losses of approximately 10m and 7m respectively while the company revealed it was in talks to dispose of its social gaming arm.
“We are in active discussions regarding the sale of Win, the Group’s social gaming business and expect to make a further announcement shortly,” the trading update read.
The company also said discussions regarding a potential sale or break-up of the entire business were ongoing after having admitted to takeover talks last month.
“Further to the announcement made on 12 November 2014, the Group is continuing its discussions with several parties regarding a variety of potential business combinations with a view to creating additional value for bwin.party shareholders,” the trading update read.
“As previously announced, there can be no certainty as to whether or not such discussions will result in an offer being made for the Company. Further announcements will be made as and when appropriate.”
Bwin.party’s share price closed at 116.2p on Tuesday evening.